Index: wp-admin/includes/ajax-actions.php
===================================================================
--- wp-admin/includes/ajax-actions.php	(revision 39293)
+++ wp-admin/includes/ajax-actions.php	(working copy)
@@ -139,18 +139,11 @@
 	 * @param string      $s          The search term.
 	 */
 	$term_search_min_chars = (int) apply_filters( 'term_search_min_chars', 2, $tax, $s );
-
-	/*
-	 * Require $term_search_min_chars chars for matching (default: 2)
-	 * ensure it's a non-negative, non-zero integer.
-	 */
 	if ( ( $term_search_min_chars == 0 ) || ( strlen( $s ) < $term_search_min_chars ) ){
 		wp_die();
 	}
 
-	$results = get_terms( $taxonomy, array( 'name__like' => $s, 'fields' => 'names', 'hide_empty' => false ) );
-
-	echo join( $results, "\n" );
+	echo $term_search_min_chars;
 	wp_die();
 }
 
@@ -177,8 +170,8 @@
 		$test_str = '"wpCompressionTest Lorem ipsum dolor sit amet consectetuer mollis sapien urna ut a. Eu nonummy condimentum fringilla tempor pretium platea vel nibh netus Maecenas. Hac molestie amet justo quis pellentesque est ultrices interdum nibh Morbi. Cras mattis pretium Phasellus ante ipsum ipsum ut sociis Suspendisse Lorem. Ante et non molestie. Porta urna Vestibulum egestas id congue nibh eu risus gravida sit. Ac augue auctor Ut et non a elit massa id sodales. Elit eu Nulla at nibh adipiscing mattis lacus mauris at tempus. Netus nibh quis suscipit nec feugiat eget sed lorem et urna. Pellentesque lacus at ut massa consectetuer ligula ut auctor semper Pellentesque. Ut metus massa nibh quam Curabitur molestie nec mauris congue. Volutpat molestie elit justo facilisis neque ac risus Ut nascetur tristique. Vitae sit lorem tellus et quis Phasellus lacus tincidunt nunc Fusce. Pharetra wisi Suspendisse mus sagittis libero lacinia Integer consequat ac Phasellus. Et urna ac cursus tortor aliquam Aliquam amet tellus volutpat Vestibulum. Justo interdum condimentum In augue congue tellus sollicitudin Quisque quis nibh."';
 
 		 if ( 1 == $_GET['test'] ) {
-		 	echo $test_str;
-		 	wp_die();
+			echo $test_str;
+			wp_die();
 		 } elseif ( 2 == $_GET['test'] ) {
 			if ( !isset($_SERVER['HTTP_ACCEPT_ENCODING']) )
 				wp_die( -1 );
Index: wp-admin/js/tags-suggest.js
===================================================================
--- wp-admin/js/tags-suggest.js	(revision 39293)
+++ wp-admin/js/tags-suggest.js	(working copy)
@@ -1,7 +1,7 @@
 /**
  * Default settings for jQuery UI Autocomplete for use with non-hierarchical taxonomies.
  */
-( function( $ ) {
+( function( $, window ) {
 	if ( typeof window.tagsSuggestL10n === 'undefined' || typeof window.uiAutocompleteL10n === 'undefined' ) {
 		return;
 	}
@@ -45,6 +45,7 @@
 		options = $.extend( {
 			source: function( request, response ) {
 				var term;
+				var minLength;
 
 				if ( last === request.term ) {
 					response( cache );
@@ -54,35 +55,28 @@
 				term = getLast( request.term );
 
 				$.get( window.ajaxurl, {
+					tax: taxonomy,
+					q: term,
 					action: 'ajax-tag-search',
-					tax: taxonomy,
-					q: term
-				} ).always( function() {
-					$element.removeClass( 'ui-autocomplete-loading' ); // UI fails to remove this sometimes?
-				} ).done( function( data ) {
-					var tagName;
-					var tags = [];
+				} ).done( function( limit ) {
+					minLength = limit;
+					if ( minLength == 0 || term.length < minLength ){
+						$element.removeClass( 'ui-autocomplete-loading' ); // If under limit hide auto-complete
+						response( cache );
+						return;
+					}
 
-					if ( data ) {
-						data = data.split( '\n' );
+					$.get( window.tagsSuggestL10n.rest_url, {
+						taxonomy: taxonomy,
+						search: term
+					} ).always( function() {
+						$element.removeClass( 'ui-autocomplete-loading' ); // UI fails to remove this sometimes?
+					} ).done( function( data ) {
+						response( data );
+					} );
 
-						for ( tagName in data ) {
-							var id = ++tempID;
-
-							tags.push({
-								id: id,
-								name: data[tagName]
-							});
-						}
-
-						cache = tags;
-						response( tags );
-					} else {
-						response( tags );
-					}
+					last = request.term;
 				} );
-
-				last = request.term;
 			},
 			focus: function( event, ui ) {
 				$element.attr( 'aria-activedescendant', 'wp-tags-autocomplete-' + ui.item.id );
@@ -118,10 +112,10 @@
 			close: function() {
 				$element.attr( 'aria-expanded', 'false' );
 			},
-			minLength: 2,
 			position: {
 				my: 'left top+2'
 			},
+			minLength: 2,
 			messages: {
 				noResults: window.uiAutocompleteL10n.noResults,
 				results: function( number ) {
@@ -180,4 +174,4 @@
 		return this;
 	};
 
-}( jQuery ) );
+}( jQuery, window ) );
Index: wp-includes/script-loader.php
===================================================================
--- wp-includes/script-loader.php	(revision 39293)
+++ wp-includes/script-loader.php	(working copy)
@@ -547,6 +547,7 @@
 			'termSelected' => __( 'Term selected.' ),
 			'termAdded'    => __( 'Term added.' ),
 			'termRemoved'  => __( 'Term removed.' ),
+			'rest_url'     => rest_url( '/wp/v2/tags' )
 		) );
 
 		$scripts->add( 'post', "/wp-admin/js/post$suffix.js", array( 'suggest', 'wp-lists', 'postbox', 'tags-box', 'underscore', 'word-count', 'wp-a11y' ), false, 1 );